The history of the American nonprofit sector is more than just a fascinating story. It is also a tale, to quote Lester Salamon, of resiliency, of a movement that transformed over time in response to changing circumstances, events, customs, and laws, and the development of the population within which it operated.

The phenomenon of Americans organizing for not only private purposes, but also to bring about social and legal change, a trait noted by de Tocqueville as early as 1835, is one of the key chromosomes woven into the DNA of today’s nonprofit arena. “Wherever, at the head of some new undertaking,” he wrote, “you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.”

An overview of the central events in the evolution of America’s private, citizen-led organizations, those influences that sometimes nudged and sometimes aided its progress, is the focus of my new book, Braided Threads. This account of the origins and eventual maturation of our complex nonprofit realm is offered as a tool the sector’s professionals and thought leaders can use to help plot the course our sector will follow over the coming decades.

As it does today, the arena we call “nonprofit” has faced challenges in the past, some of them truly existential. It survived because it was not only willing to alter its strategies and approaches, but often because it was already doing so as the full potential of changes in its environment were becoming clear.

Few of these adaptations were as dramatic and transformative as was the seminal shift from charity to philanthropy. The following excerpt introduces the period and circumstances of this crucial change in course. — Robert M. Penna

The 100-year span from roughly 1820 through the Jazz Era was possibly the most important period in the evolution of the modern American nonprofit sector. It witnessed several significant trends that shaped our current nonprofit arena. But it was also during this timeframe that the single most important development took place, the shift from charity to philanthropy.

Charity had traditionally always been personal, not only primarily springing from a sense of duty or compassion in an individual, but also mostly aimed at individuals, be it one person or a family in need. Philanthropy, by contrast, is something altogether different.

When most people today hear the word “philanthropy,” they think of the great foundations launched by the likes of Carnegie, Rockefeller, Ford, and Vanderbilt. They think of the giving away of money in large amounts. With this in mind, most would date the birth of American philanthropy as roughly coinciding with the Gilded Age and the era of the Robber Barons, continuing through names like Gates and Zuckerberg today. But in this, most people would be wrong.

Philanthropy was actually coined as a term in the late 1600s, and came from the Greek meaning love of mankind; whereas “charity” comes from the Latin caritas, or love, as in the sense of tenderness or mercy. While these concepts aren’t quite two sides of the same coin, they did become the twin pillars of the practice of American benevolence, the important difference between them being that while charity engages individuals in usually concrete, direct acts of compassion and connection to others, philanthropy has always had both broader goals and implications.

As early as 1704, the term philanthropy referred to “an inclination to promote the Publick Good.” In practice, it sought to apply reason to the solution of social problems. It aspired not so much to aid individuals, as to aid and, importantly, reform society. It focused far less on alleviating specific cases of need, than it did on the question of why the need, why certain negative circumstances, existed. It also became, as opposed to charity, institutional and abstract nearly from the beginning.

By 1800, the agenda of at least some of the newly formed organizations was socially ambitious. As early as 1780, some of these socially conscious groups, particularly in New England, were pushing for significant penal reform, advocating for an end to the “brutalization” of law breakers—then subjected to such punishments as whipping, branding, shaming, and the pillory and stock—arguing instead in favor of penitentiaries where the convicted could “ponder the error of their ways.” Incarceration, in this early view, was both charity and philanthropy, gentler on the offender and, through prison ministries, an avenue by which the causes of criminality might be addressed. This activist gene in the sector’s DNA was to color the actions and priorities of a major portion of these groups during the whole century, and continues to have a significant influence today.

But the nation was also changing, and with those changes much that had been familiar began to fade away.

While America was still an overwhelmingly rural and agrarian nation in the mid-1800s, we already had large cities that seemed to be growing by the week. Fueled in part by waves of immigrants, but also by new opportunities and an anonymity impossible to achieve in smaller, rural communities, by 1840 the population of New York City had grown to 312,710. If we add to this the population of neighboring Brooklyn, then a separate city, the urbanized area surrounding New York Harbor had a population of over 350,000. Baltimore, meanwhile, boasted 102,313 residents. New Orleans had 102,193, and Philadelphia and Boston over 93,000 each.

Within ten years, New York City would have 515,547 residents (and Brooklyn 96,838), Baltimore would have 169,054, Boston 163,181, Philadelphia 121,376, and New Orleans 116,375.

By 1860, New York would have over one million residents.

Important changes in essential economic relationships were also playing a part in the shifting social dynamics. The merchant class was growing even more wealthy and remote from the poorer classes. Early industrialization and related endeavors like the building of the railroads, mining, and large-scale timber harvesting, brought with them child labor, worker mortality, wretched living conditions such as the young nation had never seen. The abuse of alcohol also took an ever-increasing toll.

Meanwhile, society, particularly in the North, embraced the relatively recent development of contract theory, which imposed a harsh new rationalism on social relationships. And always lurking just over the southern horizon were the horrors of slavery, of which the rest of the nation was increasingly and uncomfortably aware.

In this environment, the personal charity of a bygone era seemed ever more impossible and impractical. It also began to be questioned. Charity was always focused on treating the symptoms of poverty and disadvantage, the hunger, the homelessness, the helplessness people might experience. In the face of growing social problems, and particularly their concentration in the burgeoning cities, however, more and more people began to wonder if charity could ever solve the issues at hand. On an ever-increasing scale as the 1700s faded into distant memory, people began to look at the causes of some of the social evils around them and wonder if more systemic solutions were not needed.

In answer to this, the new philanthropy that emerged in the early decades of the 1800s was very distinct from traditional charity in its basic aim. Almsgiving, direct relief, was now seen as a waste of resources, because whatever was given would soon be gone… while the recipient’s circumstances would not have changed, leading to another round of need soon to follow. More to the point, to some observers of the time it not only seemed clear that traditional forms of charity and almsgiving were inadequate to the task of alleviating misery, but might have actually been aggravating it.

Philanthropy, by contrast, was seen as an improvement upon charity because it sought to resolve the conditions it addressed, and the citizens’ association came to be seen as the perfect vehicle for accomplishing this lofty goal.

New Players

Several segments of American society, marginalized or disenfranchised from power in America, took particular advantage of the opportunities presented by this evolving situation to indelibly alter not only the direction of American benevolence, but its character and mission.

As early as 1793, independent Black churches in the North began to assume charitable missions within their communities. They also sought to alleviate the conditions under which so many of their race suffered, agitating for social, political, and economic rights which at the time were restricted to whites. Help was also offered in the form of mutual aid and improvement societies. By 1830, in Philadelphia alone, there were over forty-five different Black Freedmen’s and women’s associations operating in the city, and within one year, they had paid out over $5760—about $142,692 in today’s money—in charitable benefits. These organizations would continue to be vital partners in the Black philanthropy movement for decades and decades to come, their aim always being to address, in a way outsiders never could, the challenges their community faced. Moreover, the idea never completely faded away; strong echoes of this movement would be heard again over one hundred years later in the community-based and culturally attuned organizations that sprang out of the Civil Rights Movement and Great Society.

Two other groups that both utilized and capitalized upon the emerging philanthropic movement were women and, perhaps surprisingly, the mainstream clergy.

Stymied in many ways from undertaking a larger civic role by the mores of the day, women assumed an early leading role in organized American benevolence, using associations to create a “separate sphere” of educational, religious, and cultural activity. In 1795 the first female charitable organization, The Female Society for the Relief of the Distressed, was formed in Philadelphia. Funded by its members, it pledged aid to those of any faith, irrespective of “nation or color.” In 1800 Evangelical Presbyterians formed the Female Association for the Relief of Women and Children. The earliest of these efforts were strictly the creatures of the governing class. But although often underwritten financially by men, these entities were virtually always founded and run by women… very often, the wives, daughters, or sisters of the moneyed men who comprised the civic elite. This development has been linked to the increased freedom and power that women of the American middle class were experiencing as the 19th century unfolded, and to their related claim, widely accepted throughout Victorian Era America, of possessing a morality superior to that of men… leaving them powerful actors in the century’s developing philanthropic efforts.

It was one of the ironies of history that these women, constrained in their activities by the sexism of the age, but embodying the growing bourgeois sensibilities of the time, were able to capitalize upon the popular notion of “a woman’s more sensitive eye” and in many cases work around the crass, cruel, unfeeling dictates of male-dominated commerce, calling attention to the high human cost of the largely male-ordered, Dickensian world in which they lived… even as the fruits of that world made possible their position, voice, and actions.

With amazing rapidity, the organizations these women (and their considerably fewer male allies) founded, often fueled by what has been called the “Protestant missionary impulse,” cast their eyes and their attentions upon a wide range of causes.

This new, largely female-led philanthropy movement tackled a broad array of social issues, ranging from penal reform and the amelioration of cruelty to animals, to measures aimed at addressing the abandonment and mistreatment of children, from the care of the sick and insane, to the treatment of reformed prostitutes. These voluntary groups opposed drunkenness, dueling, wars and imperialism, the abuse of the poor, press gangs, and injustice generally. They organized and worked to end political corruption, the slave trade, slavery itself, and the “seduction and abandonment of women.” In the broadest sense, their aim was to use voluntary associations to steer the nation away from not only slavery and inebriation, but its often ill-disguised intolerance of the poor, weak, infirm, and vulnerable. Ultimately, they contributed not only to the nonprofit sector as we know it today, but to the American welfare state.

Robert M. Penna is the author of the Nonprofit Outcomes Toolbox (Wiley, 2011) and Braided Threads (Routledge, 2018). He has served as an outcomes and performance consultant to the United Nations, Charity Navigator, and the World Scout Bureau, and has presented before nonprofit audiences around the world. Recently, he was interviewed on Tony Martignetti's Nonprofit Radio show, which you can listen to here.

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